Young v. Jones

816 F. Supp. 1070 (1992)

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Nature of the Case

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Facts

Ps are investors from Texas. PW-Bahamas issued an unqualified audit letter regarding the financial statement of Swiss American Fidelity and Insurance Guaranty (SAFIG). Based on that audit letter Ps deposited $550,000.00 in a South Carolina bank. Other defendants sent the money from the South Carolina Bank to SAFIG. The financial statement of SAFIG was falsified. Ps lost the money and seek to recover damages. P's first cause of action alleged is that the Bahamian accounting firm Price Waterhouse, Chartered Accountants, a Bahamian general partnership (PW-Bahamas), negligently performed an audit and negligently released an audit letter upon which Ps relied to their detriment. There are no allegations that Price Waterhouse-US (PW-US), or any individual U.S. partner who resides in South Carolina, was involved in the subject transaction. The unqualified audit letter identified the Bahamian accounting firm only as 'Price Waterhouse.' The audit letter also bore a Price Waterhouse trademark and was signed 'Price Waterhouse.' Ps assert that PW-Bahamas and PW-US operate as a partnership. In the alternative, plaintiffs contend that if the two associations are not actually operating as partners they are operating as partners by estoppel.